Figure 1After several punishing years, the window for biotechnology financing in the US appears to be reopening, though mainly for larger companies with a strong product pipeline, leaving early-stage biotechs to scrap over a tightening pool of federal and local funds. Biotech companies raked in more than $12 billion (US) in 2003, the industry's second highest annual total, but well behind the $32 million raised in the boom year of 2000.Even more significant, analysts say, is the reappearance of

Courtesy of AstraZeneca The purple profit machine driven by AstraZeneca's $6 billion flagship medication, Prilosec, finally wound down last year. Once the world's largest selling prescription drug, the patents have expired, and the bright purple pill is now pink and sells over the counter at cut-rate pricing alongside Tums and Pepto-Bismol. Shares of the company sank with Prilosec's fortunes, and some analysts questioned whether AstraZeneca, the world's fifth-largest drug maker, would rebound

Brad Fitzpatrick As the first biotech drugs begin to lose patent protection in the next few years, the US biotechnology industry is beginning to fear it will soon face price-cutting generic competition. Unlike the system for approving traditional, chemically based drugs, no regulatory process exists for the approval of generic versions of the newer bioengineered medicines. Many biotech executives had come to believe their products would enjoy monopolistic pricing even after their patents expir

In a move designed to speed approval of new biotech products, the US Food & Drug Administration has transferred oversight for many new biotech therapies from its office that reviews biologics to the one that approves traditional drugs. Biotech and pharmaceutical companies had been pushing for the change for years, because it's generally believed that companies can more easily get regulatory clearance from the drug review section of the agency. This change became a reality with the arriva

Courtesy of Getty Images Among the most fiercely competitive corporations in the business world, pharmaceutical companies jealously guard their secret research and profitable patents. Yet an industry group is now promoting a plan to break down the walls dividing the world's major drug makers for an all-out effort against cancer. The CEO Roundtable on Cancer, which met earlier this month, is considering a proposal to create a research collaboration similar to one established by the US semicond

Erica P. Johnson The marble Harvard Medical School quadrangle sits up on a slight plateau, like an ancient temple, rising above Boston's busy Longwood section. Inside, glass windows soar above well-worn staircases. Persian carpets cover the floors. Slim, antique lockers line the halls of the lower floors. The quad is like an island of antiquity, surrounded by bustling medical complexes specializing in futuristic high-tech medicine. Here in the temple, there is little bustle. Decisions evolve s

Images courtesy of Merck & Co. For the pharmaceutical industry, the numbers do not add up. Investment in drug development has tripled in the past 10 years to more than $30 billion (US), but the industry has fewer new drugs to show for it. After peaking at 131 in 1996, the number of new drug applications filed with the US Food and Drug Administration dropped to 78 in 2002. In response, pharmaceutical companies are scrambling to realign and reinvent research and development operations. Mass mer

Anne Macnamara Like the life systems it studies, the biotechnology industry evolves to survive. Today, companies founded and generously funded in the 1990s are scrambling to transform themselves from suppliers of technology, data, or discovery targets into full-fledged drug development firms that make products for patients. Those that fail to make the transformation face the future as low-profit providers of biotech building blocks, or as acquisitions in the business world's equivalent of exti

Courtesy of The Herbert Hoover Presidential Library Museum  NEW YORK STOCK EXCHANGE: After the crash of 1929, unoccupied traders loiter. Historically low stock prices in 2002 hearken back to those more destitute times. It took awhile to catch up, but biotech and pharmaceutical companies have now shown they are not immune to the malaise that crept across the US economy two years ago. The collapse of the Wall Street technology bubble has left both large and small drug discovery and develop

Image: Erica P. Johnson Research scientists devote decades to learning how to evaluate complex chemical and biological systems. Once they master that, they may be asked to join a biotech firm. And that can thrust them into a new science--Wall-Street style analysis--to verify the firm's financial promise. Even for seasoned venture investors biotech is one of the more difficult industries to evaluate. Add to that the uncertainty raised by a rash of corporate accounting scandals in the past yea

Image: Erica P. Johnson Pharmacogenomics holds the promise of delivering safer, better designer drugs--and profits--to pharmaceutical manufacturers. But the technology also poses a challenge to the industry's current, highly successful business model that relies on one-size-fits-all blockbuster drugs. For small biotech companies and large drug manufacturers alike, pharmacogenomics remains only one component of genome-based research and consumes only a small part of the $30 billion (US) in ann

Image: Anne MacNamara Like prudent squirrels bracing for a harsh winter, biotech managers are scrambling to conserve money in an effort to keep their companies alive during the current financing downturn. Biotechs have not gone under in droves, despite the funding turn back. Most have survived using strategies such as licensing and partnership deals, innovative financing, and simple cost cutting, including layoffs. "We haven't seen the kind of consolidation you would expect. It is a little sur